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Starbucks Jumps on the Plant-Based Coffee Train

Starbucks announces it is adding several new plant-based alternative beverages to its menu, including almond milk, coconut milk and oat-milk based options.

As if ordering a double, half-caf, mocha chai Frappuccino with half whip wasn’t complicated enough, Starbucks  (SBUX) - Get Report on Tuesday said it was adding two new plant-based milk-alternative beverages to its menu, including an Almondmilk Honey Flat White and a Coconutmilk Latte.

The Seattle-based company said it would add the drinks to its permanent menu in select locations in the U.S. and Canada as part of its new winter food and beverage lineup. It is also rolling out a third non-dairy option, the Oatmilk Honey Latte, in select Midwest U.S. locations.

Approximately 1,300 participating stores in Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri and Wisconsin will begin to offer oat milk as an additional non-dairy option, along with the featured Oatmilk Honey Latte.

The move comes as the global coffee-chain giant continues to both fend off competition from the likes of more economical and arguably less complicated beverage providers like Dunkin' Donuts  (DNKN) - Get Report and battle coffee-shop fatigue among consumers looking for more local experiences.

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Oat milk, a fast-growing milk alternative, is known for its mild flavor and velvety foam, and has been on the menu at Starbucks stores in Europe since January 2018 and select Starbucks Reserve locations since March 2019.

Shares of Starbucks received a year-end boost after analysts at J.P. Morgan, who after meeting with senior management including CEO Kevin Johnson, lifted their rating on the world's biggest coffee chain, citing confidence in its “growth at scale” agenda.

J.P. Morgan analyst John Ivankoe lifted his rating on the stock to overweight and raised his one-year price target to $94 a share.

Shares of Starbucks were down 0.62%, or 55 cents a share, at $87.58 in Tuesday morning trading. The stock has traded between $61.67 and $99.72 over the past 12 months, though has remained in a range of between $86 and $88 over the past month.